Optimal Distributed Energy Resource Coordination: A Decomposition Method Based on Distribution Locational Marginal Costs

In this paper, we consider the day-ahead operational planning problem of a radial distribution network hosting Distributed Energy Resources (DERs) including rooftop solar and storage-like loads, such as electric vehicles. We present a novel decomposition method that is based on a centralized AC Optimal Power Flow (AC OPF) problem interacting iteratively with self-dispatching DER problems adapting to real and reactive power Distribution Locational Marginal Costs. We illustrate the applicability and tractability of the proposed method on an actual distribution feeder, while modeling the full complexity of spatiotemporal DER capabilities and preferences, and accounting for instances of non-exact AC OPF convex relaxations. We show that the proposed method achieves optimal Grid-DER coordination, by successively improving feasible AC OPF solutions, and discovers spatiotemporally varying marginal costs in distribution networks that are key to optimal DER scheduling by modeling losses, ampacity and voltage congestion, and, most importantly, dynamic asset degradation.